The formation of neural retina (NR) from retinal pigmented epithelium (RPE) of chick embryos in culture was investigated. In cultures of explants of PRE, depigmented, preretinal foci, consisting of 50 to 100 cells appeared in the pigmented central portion of the explant within three days. Then these depigmented cells increased rapidly in number and by about day 14 they formed characteristic spherical bodies, which were identified as a neural retinal-like structure (NR structure) by electron microscopic observations. Culture of explants of RPE from embryos of different stages showed that the capacity of embryonic RPE to form an NR structure decreased steadily with embryonic age from stage 24 to 27. At and after stage 27, no foci leading to the neural retinal differentiation were formed in the explants. Medium conditioned by cell cultures of chicken embryonic NR, RPE, or chondrocytes had no effect on the formation of NR structures by explants of RPE.